Pierre Omidyar established the eBay Foundation in 1998 with an endowment of pre-IPO eBay stock. The foundation has always been modest in size, which is probably why we haven't written about it before. It had assets of $30 milllion in a recent year, and gives out between $3 million and $5 million annually to a limited set of grantees.
But what's interesting about the eBay Foundation is that, like the Omidyar Network, it has long blended traditional philanthropy and a venture investing model, with an eye toward backing scalable efforts at social change that can become financially sustainable over time.
Of course, this is an approach that a great many funders are embracing these days.
One main area of interest at the eBay Foundation is creating economic opportunities in the U.S. and emerging markets. It pursues this goal mainly by supporting small business growth and financial inclusion. Recently, the foundation teamed up with Village Capital to advance financial inclusion, focusing specifically on the world’s unbanked population.
Village Capital, which supports entrepreneurs, is an interesting outfit. It has a nonprofit arm, VilCap, Inc., which runs "business development programs for early-stage entrepreneurs in agriculture, education, energy, financial inclusion, and health." Its for-profit arm, VilCap Investments, invests money in the most promising ventures hatched by gradautes of these programs.
This kind of blended approach is especially well suited to financial inclusion efforts, an arena of keen interest to foundations right now, but in which for-profit models can also succeed. Approximately 25 percent of U.S. households either lack access or have limited access to traditional financial services. And although the number of unbanked people across the globe has decreased, it still stands at around 2 billion. In this latest partnership, Village Capital and the eBay Foundation sought out entrepreneurs to address financial inclusion challenges faced by historically underserved populations both in the United States and abroad.
Village Capital chose a total of 12 diverse financial organizations ranging from Lendable, a company that specializes in risk analytics for debt in East Africa to Walteros, a company specializing in mobile wallet solutions for the unbanked and underbanked Latino consumers in the United Sates. Each chosen organization participates in the company’s business development workshop, which includes training, mentorship, and customer interaction activities. At the conclusion of the workshop, Village Capital assesses each organization and ultimately choose two to receive a $50,000 investment.
This latest “FinTech” endeavor marks the second joint effort between eBay and Village Capital. Last year, the foundation, Village Capital and Ashoka Globalizer joined forces to forward the eBay Foundation’s economic opportunity agenda by focusing on increasing access to financial service in the US. The two companies that each received $50,000 investments were WiseBanyan, an online financial advisor service aimed at helping first-time investors create diversified portfolios; and eMoney pool, an online platform that allows users to set up community funded savings accounts.
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